Would you build your house on top of quicksand? ...I don’t think so!
What is a business plan, and why do you need one? A business plan is the foundation that your business is built upon, and without it...it can be hard to get funding or supporters for your business. Your business plan is a living, breathing document that is meant to change and grow just as your business does. The entirety of your business should be organized into this one document which will boost your credibility - people will take you more seriously because you have a thorough plan laid out. After all, there is a HUGE difference in the “dreamers” and the “doers”.
Below are the key essential sections that should be included in what we like to call a "bank ready" business plan. 1. Executive Summary
2. Company Description
3. Industry Analysis
4. Customer Persona
5. Marketing Plan
6. Operation Plan
7. Management Team
8. Financial Plan
Let's cover them in greater detail shall we?
The executive summary is typically written last as it is a summary of the entire business plan. Think of your executive summary as an extended elevator pitch. This section is important as it should capture the reader's interest quickly, be precise, and make the reader want to continue to read.
Key pieces you will want to consider in your executive summary are: 1. Introduce your business idea. Make sure you are clear on what the overall objective is for your product and/or service. 2. Clearly identify the problem & solution. This will begin to help the reader understand your product and/or service. 3. Your goals and keys to success for the business. Articulate what your want to accomplish and what your keys to success will be. 4. Your target markets. Who do you want to sell to?Identify your management team. Highlight their strengths and what they bring to the table. 5. Financial outlook for the business. If you need funding clearly state exactly how much money you want, how it will be used, and how it will make your business more profitable.
Your company mission statement can be reduced to a simple tagline (“Solid Rock is a consulting firm helping startup simplify business fundamentals while leading in strategic planning.”) or you can go more in depth. (“Solid Rock Consulting is a management firm helping startups, small business and fortune 500s. Our mission is to identify high value opportunities, address critical challenges, and transform the way organizations do business.”) Whether you choose tagline or more involved mission statement make sure you keep it to one or two sentences. The point here is that you will want to list the overall reason for your business existence.
Here you will briefly describe the industry you are entering. You will want to list things such as: 1. Is the industry is declining, growing, stable? 2. If the industry is declining how will you revive the industry? This is typically viewed as a disruptor in the industry. So, you will definitely need solid research and a plan. 3. If the industry is growing and/or stable, how will your company compete and what will your specific advantages will be?
Your customer analysis is where you would describe your targeted customer. At Solid Rock Consulting we call this your customer persona. We call it a persona because we want to understand more than just age and location, we want to understand what makes the customer buy. What are their interests? What is their social setting? When creating your customer analysis, it is key to understand you may have multiple types of customers. Multiple as in; Business to Consumer (B2C), Business to Business (B2B), and/or Business to Government (B2G). Based on the customer type you will want to collect meaningful information pertinent to the customer type.
Now that you have taken the time to perform an industry analysis and understand who your ideal customer is you will want to spell out clearly how you will market to them. It is important that before you create your marketing plan you create content that speaks the language your customer speaks as well as you position your content in places your audience will see it. Example: If you are selling a specific type of shoe to a diabetic patient, you will want to ensure you are leveraging content and language that matters to diabetic patients. Their needs will be completely different than the needs of non-diabetic patients. Listen closely. Language matters! Not only do you need to consider language but also where your content will be placed. Are you posting content on Facebook when it could have higher visibility in a podiatrist office? You can have an awesome business but if no one knows about it (visibility) then you will not make sales. Positioning your brand and brand message where it is accessible to your ideal client is key. This is called visibility.
Your operations plan explains the daily operation of your business, including its location, equipment, personnel and processes. This section adds visibility into your internal processes and ensures continuity exist in your business. Here are some things you want to consider about your operations are: 1. Production
2. Quality control
4. Legal environment
5. Credit/Payment policies
The management section gives your reader a understanding of who the key players are within your organization and where you have gaps to fill. You’ll want to cover the following: 1. Current management team
2. Key planned hires.
3. Key Advisors
The financial plan is arguably the most important piece of the business plan. It allows investors to take a detailed look at how much money you need, how the funds will be allocated, how profitable you plan to be and your projections for growth. The financial section should be comprised of three sections (four if you are a startup). The first section is your projected profit and loss statement, second is your balance sheet, and third is your cash flow statement. Need help writing your business plan? Click here to shop for your bank ready business plan.